Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless. Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease. For the accounts my options are cash, accounts recievables, inventory, prepaid rent, fixtures and equipment, accounts payable, interest payable, wages payable, notes payable, paid-in capital, and retained earnings.

Transaction 1 On March 1, two former classmates invested a total of $24,000 in cash in exchange for 1,000 shares of stock each.

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Transaction 2 The corporation quickly acquired $44,000 in inventory, 50% of which was paid for in cash. The rest was acquired on open accounts that were payable after 30 days.

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Transaction 3 A store was rented for $6,000 for the year. A lease was signed for one year on March 1. Rent for the first 2 months was paid in advance. [Note: Record the March 1 transaction first and the March 31 adjustment second.]

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Transaction 4 Advertising was purchased for cash of $2,500 from a newspaper owned by one of the stockholders; additional advertising services of $5,000 were acquired on account. [Note: Combine both transactions into one entry].

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Transaction 5 Sales were $60,000. Merchandise was sold for 2 times its purchase cost. 40% of the sales were for cash. [Note: Record the sales transaction first and the expense transaction second]

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Transaction 6 Wages and salaries incurred in March amounted to $10,600, of which $4,900 was paid.

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Transaction 7 Miscellaneous expenses paid for in cash were $1,900.

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Transaction 8 On March 1, fixtures and equipment were purchased for $4,000 with a downpayment of $1,000 plus a $3,000 note payable in one year. Interest of 5% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 12 years with no expected salvage value. Depreciation on the fixtures and equipment is computed on a straight-line basis. [Note: Record the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]

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Transaction 9 Cash dividends totalling $4,800 were declared and paid to stockholders on March 31.

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